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The Worst Is Over

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They are going to engineer the appearance of that, but forget about it actually happening. The numbers are too big and the lies and promises about the future are way too large.

They might even do a controlled demolition of a bank, you never know.

the numbers are not too large to continue the bonuses and extraordinary salaries I note.

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That's what got me started, the M&S guy. What does he know?

He knows that he wants to leave M&S on a high, with good trading figures and his reputation intact, so he can line up further directorships. He knows he needs to keep shareholders happy and hand over to the new boss from Morrisons without upsetting the markets.

He also knows the S is about to HTF........

Nothing to see here. Move along please! ;)

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I think that many folk believe the 6Bn cuts are/were all that are needed. I see rich boy Rose says all's OK as M&S made a few bob this year. The cuts come next year. Why do journalists ignore that? (Oh yes to scapegoat Brown). Prior to the election all three parties agreed that the bulk of the cuts come in 2011 and the then government started the process. There are, I believe, about 34Bn cuts scheduled in by the previous government starting 2011. The argument was whether or not to get a token cut in before that to please the financial community. In the end Brown lost and we have the present set up (not altogether a bad outcome IMO). The TOKEN cut of 6Bn makes zero difference to the problem but it "shows willing".

The collapse of the banking system due to massive fraud and systemic corruption will cost far more than any national government can afford. To get back to "normal" might take 15-20 years and during that time taxes up, spending down, low IR for savers, high IR for borrowers. For example UK banks have written off 300Bn in bad debt, whereas the UK government has "printed" a mere 200Bn to replace it. The transference of debt from the bank to the public is bad enough but the fact there is still a gargantuan sum to find suggests to me that the pain has not even started, never mind "worst is over" nonsense.

I have repeated given my view that UK house prices will halve. I am beginning to wonder if that is somewhat optimistic (as in they will fall much more).

The issue is whether or not prices deflate gently (the so-called "soft landing") or whether there is a tumultuous "event". The event looks more and more likely driven by the general EU problems. I would like to believe in the soft landing, but it looks impossible if one takes a realistic view of the situations in Spain and Eire.

I accept all your arguments. Question is will the house price crash as you predict in pounds or not.

You should know they are crashing anyway if you count in USD , gold etc .

At 1.42 rate, the house prices have crashed more than 15% anyway in USD in last 2-3 months.

So does it make any difference to people working & living in UK? As of now no change.

Foreign investor are buying stocks in big way

Till UK govt can keep inflation under 5% , let currency go down by 30% or more. It does not matter much.

It fact it is good for the country as importers are taking a hit.

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I accept all your arguments. Question is will the house price crash as you predict in pounds or not.

You should know they are crashing anyway if you count in USD , gold etc .

At 1.42 rate, the house prices have crashed more than 15% anyway in USD in last 2-3 months.

So does it make any difference to people working & living in UK? As of now no change.

Foreign investor are buying stocks in big way

Till UK govt can keep inflation under 5% , let currency go down by 30% or more. It does not matter much.

It fact it is good for the country as importers are taking a hit.

must be good news for the American housing market...UP 40% against Uk buyers.

funny, but US banks are just as fracked as they were when the dollar was 2.10

now, pack up your nonsense and make a serious point.

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w8klzt.jpg

Interesting whats happening to LLOYDS,, wonder if Tax Payers will end up owning more if the price falls to 40 Again?

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I accept all your arguments. Question is will the house price crash as you predict in pounds or not.

You should know they are crashing anyway if you count in USD , gold etc .

At 1.42 rate, the house prices have crashed more than 15% anyway in USD in last 2-3 months.

So does it make any difference to people working & living in UK? As of now no change.

Foreign investor are buying stocks in big way

Till UK govt can keep inflation under 5% , let currency go down by 30% or more. It does not matter much.

It fact it is good for the country as importers are taking a hit.

This will affect an almost insignificant amount of houses in this country (London being the exception of course).

For your average joe who just wants a house to live in and raise a family, the GBP/USD is of no relevance.

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Collapse first.

Politically it's impossible to change anything before. And of course, there will almost certainly be another election and almost certainly labour will be back in to "fix the problem of tory cuts" once that happens.

There is no political configuration that can solve the social problem of everyone being promised 20 or 30 times more wealth than there actually is. There is no political configuration that can solve the problem of all those badly made plans and ruined futures. The general public and in particular those on the receiving end of public sector largesse will have to find out by experience that the cupboard is bare, they are never going to just believe it because a handful multi millionaires tells them it's so.

And when they find out, rage.

O Lord, things must be bad, Injin is talking sense!

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Interesting whats happening to LLOYDS,, wonder how muchif Tax Payers will end up owning more if when the price falls to 4 0 Again?

Fixed that for ya

Edited by Tamara De Lempicka

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must be good news for the American housing market...UP 40% against Uk buyers.

Not exactly: Average US nominal houses prices seem to be down about 20%.

I don't think the £ is all that important to them :)

TBH we have more wiggle-room than them, imagine what a mess we'd be in if BoC targetted sterling for its peg instead of USD.

Edited by huw

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I have an awful feeling that a belief is taking hold that by a simple announcement of cuts and 'yeah, we're going to sort it all out', a bit of sunshine and we have hit the return to normal phase. I expect house prices to rise. I have given up thinking that this enormous core problem will EVER be addressed.

I don't think the worst is over BUT crucially I think most people now feel ( rightly or wrongly) that the path is set ( eg Govts will deal with deficits, further bank/sovereign debt probs will emerge but they'll be dealt with, and countries will enter into an age of austerity for the next five years)...... however like you I don't believe theres any great feeling that we'll return to normal ( if normal means growth and stability) and I don't think that house prices will rise. I have long supported the unpopular theory that we are in for a prolonged correction with the real corrective work being done through inflation not through nominal corrections. I also think that below inflation wage increases will play their part in correcting the analysis of house prices vs household income....... so don't despair there will be a further correction but if you were waiting for a crash or an overcorrection then I am betting you'll be waiting in vain.

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This will affect an almost insignificant amount of houses in this country (London being the exception of course).

For your average joe who just wants a house to live in and raise a family, the GBP/USD is of no relevance.

Optimistic maybe.

Would they be the same ‘I just want to buy a house but my neighbour has bought up the whole street’ sort? What makes you think that a neighbour living across something as trivial as a stretch of water might not be as greedy as the ‘investors’ here?

Money, while printable, is an exhaustible concept. The era of Injinism should be fun?

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I don't think the worst is over BUT crucially I think most people now feel ( rightly or wrongly) that the path is set ( eg Govts will deal with deficits, further bank/sovereign debt probs will emerge but they'll be dealt with, and countries will enter into an age of austerity for the next five years)...... however like you I don't believe theres any great feeling that we'll return to normal ( if normal means growth and stability) and I don't think that house prices will rise. I have long supported the unpopular theory that we are in for a prolonged correction with the real corrective work being done through inflation not through nominal corrections. I also think that below inflation wage increases will play their part in correcting the analysis of house prices vs household income....... so don't despair there will be a further correction but if you were waiting for a crash or an overcorrection then I am betting you'll be waiting in vain.

But if inflation is higher than wage inflation, won't house prices have to go down relative to wages in order for this correction to happen?

If wages are static (for example) the only way for house prices to come down relative to income would be for them to nominally fall.

So inflation per se is not relevant in this scenario. You need wage increases to bring down the ratio of HPs to income. If you think we will see these, then your outcome is more likely.

If we do see inflation rising faster than wage inflation, then I think that makes things worse: Less money to spend on shopping (and less money that can be saved), followed by more unemployment, followed by lower demand for houses and a higher supply.

Forgive me if I have misunderstood your argument.

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But if inflation is higher than wage inflation, won't house prices have to go down relative to wages in order for this correction to happen?

If wages are static (for example) the only way for house prices to come down relative to income would be for them to nominally fall.

So inflation per se is not relevant in this scenario. You need wage increases to bring down the ratio of HPs to income. If you think we will see these, then your outcome is more likely.

If we do see inflation rising faster than wage inflation, then I think that makes things worse: Less money to spend on shopping (and less money that can be saved), followed by more unemployment, followed by lower demand for houses and a higher supply.

Forgive me if I have misunderstood your argument.

There are two measures here. Firstly real prices ( nominal prices adjusted for inflation) this is typically the nationwide type measure... this doesn't include any real comparisson against wages.

If there is inflation but nominal house prices stay relatively flat or decline a little then the market will be seen to correct against trend.

Secondly though the more importnant and relevant measure I think is wages.... so the point I made was that wages would rise but rise below inflation , this would have the effect of also corrrecting the wages/house prices graph over time as wages would be rising more quickly than house prices ( albeit that wage rises would still be below inflation).

So in the slowly slowly scenario both measures would slowly correct. Of course you are right that along the way with below inflation wage rises people are going to feel like they have less and less spare cash but in some ways I think this is also what feeds into allowing the prolonged period of relative stagnacy that we are entering into with house prices.

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50 year mortgages - coming to bank near you soon!! - inflate the debt away while underpinning the life of the economy - they muted it some time again - im expecting to hear it again in the summer!!

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50 year mortgages - coming to bank near you soon!! - inflate the debt away while underpinning the life of the economy - they muted it some time again - im expecting to hear it again in the summer!!

If only they could

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the numbers are not too large to continue the bonuses and extraordinary salaries I note.

Cuts, taxes and austerity are for the little people as Ivana Trump used to say not for the 'wealth creators' in the City.

Edited by realcrookswearsuits

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50 year mortgages - coming to bank near you soon!! - inflate the debt away while underpinning the life of the economy - they muted it some time again - im expecting to hear it again in the summer!!

yeah...IO 50 year mortgages....

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Irreprable in my opinion. The hardest thing to change will be the nations sentiment towards high house prices. In a way I get it, as it's more tangible than a pensions statement. But comfort in our old age is to the detriment of our own children for god's sake.

I have no faith that house prices will fall to sustainable levels so even I consider doing a BTL so at least my kids will have somewhere affordable to live when they're adults as I don;t want them living with me forever. They're only babies now, so by the time they reach adulthood the world will be a very different place.

sentiment will change though. once everyone knows a few people who have lost everything simply because they took a gamble to put a roof over their family's heads and your struggling to pay your mortgage yourself people will see the pyramid scheme for what it is. however that will take a few years. right now if you have a property conversation with people they are still bringing up their uncle who made a killing remortgaging and BTL'ing. The Wilson's are still the national hero's of middle england - that will change over the next few years, I'm certain.

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  • 189 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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